Tuesday, 11 February 2014

Red flag from the lackey

Credit Suisse described Najib’s decision to hike price of fuel, sugar and electricity as a way to assess further cuts as a 'cunning' move by a government that needs to rein in its chronic budget deficit. — Reuters pic

KUALA LUMPUR, Feb 10 — Datuk Seri Najib Razak has been warned against any major U-turn of his financial reform measures such as his government’s hesitation on the unpopular toll rate hike, as this may risk further downgrade on Malaysia’s debt rating, Credit Suisse has warned.

According to the financial services provider, more such reversals on austerity policies would only keep Malaysia under the spotlight of credit rating agencies, and cause foreign investors to flee the government bond market.

“Rating agencies are watching PM Najib to assess his resolve in the unpopular, but critical policy of reducing the fiscal deficit. The apparent U-turn on toll rate hikes is a red flag,” Credit Suisse warned in its daily report on Asia here.

“A major U-turn could cause a rating downgrade. In a rising interest rate environment, foreign investors would then sell their huge bond holdings.”

Credit Suisse described Najib’s decision to hike price of fuel, sugar and electricity as a way to assess further cuts as a “cunning” move by a government that needs to rein in its chronic budget deficit.

However, Najib’s cunning has been undermined by his fellow Umno member’s political opportunism, it said.

It cited as example the recent announcement by Deputy Prime Minister Tan Sri Muhyiddin Yassin that Putrajaya will freeze toll rates in 2014.

“Sadly, some within PM Najib’s party appear to have opted for very short-term gain, ignoring the logic and the long-term pain,” said Credit Suisse.

“Does PM Najib have the will to see this austerity through? The rating agencies are watching.”

Should rating agencies downgrade Malaysia and foreign investors abandon government bonds, it predicted that Malaysia’s stock market and ringgit will collapse, in a worst-case scenario.

Despite that, the report said it was merely highlighting a risk, and it was not Credit Suisse’s house view.

Putrajaya has embarked on a series of subsidy cuts starting from September last year, which included an increase in fuel pump price, sugar, and electricity tariffs.

The price hikes however has caused public anger, which culminated in an anti-price hike rally attended by tens of thousands of Malaysians on the New Year’s Eve. - The Malay Mail

Going through the above article reminds me of the 1997/98 Asian financial crisis and how we were basically held at ransom by the speculators, financial service providers, rating agencies, the IMF, World Bank and a host of other daylight robbers who had an eye not only on our assets but also the Prime Minister's seat in Putrajaya. During the crisis of 1997/98 those band of robbers had a lackey embedded deep or rather very high up in our administration that he almost made us bankrupt overnight. Many a businessman couldn't possibly have forgotten the atrocious interest rate hikes which killed and/or paralyzed many. Some are still living with those scars today. It was a similar scene when those institutionalised robbers were imposing all kinds of reforms, threats, warnings and red flags. The lackey did briefly lead us along the path of destruction until the timely intervention of the then Prime Minister and his able financial advisors. The lackey was in the Government then but his immoral venture was cut short and he was thrown out of the Government for his other equally immoral traits. We faced the financial crisis in our own way and prevailed without having to squeeze our people of their blood, by hiking interest rates, drastically removing subsidies and embrace unbridled 'reforms'. Do we now have a similar lackey or a band of lackeys who are dispensing the IMF-like bitter pills to the Government without any real regard to situation on the ground? Who are the lackeys and what is it that they're eyeing for this time around?

p/s Credit Suisse should first make up their mind if the 'red flag' is indeed their report or NOT before issuing such IMF-like warnings that smacks another financial conspiracy. Credit Suisse' professionalism is certainly going further down the drain.

Be dammed with Credit Suisse and all those credit rating .We have no reason to follow those dirty vultures @ Soros cronies @ AnuWar backside advise.Those rating agency should , by this time , monitor their baby in AnuWar activities . Do they want liers , hypocrete and backside lovers to be leaders in this country . That is what they want definitely .So be dammed with them . It is people first and always .PN

Credit rating agencies themselves said their outlook are just their opinion and govts are not compelled to follow. The govt under Najib is too neoliberalist when it comes to economic policies. It has hurt the ordinary Malaysians. To overcome economic crisis or problems the current govt plunged straight into the IMF type of solution. It didn't look at other alternative policies that wont strangle the people's economies. It could but it was too lazy or too dependent on the econ neo liberals that packed the PM adviser chamber. These advisers credentials are questionable. Are they real economists? The govt cannot tinker with the lives of people ok. Austerity measures and credit squeeze have inflict pain on people. The rating agencies are nothing but arms of neo liberals capitalist creatures. They favour money and capital rather than the wellbeing of employees and people as a whole. And the govt is kowtowing to these credit rating agencies. Can you imagine that?